Today’s infinitely connected world provides countless ways for you to get your message to consumers, from pay per click and social media ads to TV, radio, print and billboard ads. Each is effective in its own right, depending on the market demographics and campaign execution.
However, with a myriad of marketing options at your fingertips, it can be challenging to know which ones are actually worth your investment. It’s easy to pay money for a TV commercial or social media ad, but it’s often harder to get a solid return on investment (ROI) on the money you’re spending.
According to Merikay Marzoni, the director of marketing and public relations at Fitness Formula Clubs (FFC), with 11 clubs in the Chicago area, measuring marketing ROI starts with knowing what expectations to have from various media. “Some media are more branding related, and some media are more direct-response oriented,” she said. “They’re completely different and I don’t necessarily judge one based on how I would judge the other.”
Once you have an understanding of the response each medium tends to get, you need to formulate your marketing strategy based on your membership demographics. Are your members primarily plugged in through social media? Do Google Ads tend to drive traffic to your website? Is your primary demographic older? Do they consume content through TV, radio or print?
When your marketing strategy is in place, the duration of that campaign will reveal a lot about how prospects and members are responding to your message and, subsequently, how well your marketing dollars are working for you. Based on results from previous campaigns and market research, there are many ways to respond and formulate future campaigns.
Test, Test, Test
Throughout the year, it’s important to experiment with different marketing strategies, since what works one year might not work as well the next. “Test, test, test,” said Marzoni. “You can’t ever just assume it’s working. Generally, we try to set up benchmark metrics, and then base the results on those benchmarks.”
The simplest benchmark to measure marketing ROI is direct revenue. If multiple prospects click on a Facebook ad that takes them to a membership portal, and they sign up for new memberships, that campaign should be considered a success.
“We look at all the metrics, but we place the most significance on those metrics we can directly correlate with financial returns,” explained Tom Lapcevic, the executive chairman of ROR Partners, a digital marketing and data agency.
It’s also important to remember measuring results in certain media can be easier than others. For example, club owners today can easily track the exact number of new members who signed up through the website, and how they were directed to that page — i.e. from a search engine, social media, etc.
However, measuring the performance of your campaigns across all media can paint a better picture of your marketing ROI, according to Lapcevic. “For digital member acquisition campaigns, we measure cross-channel performance through incremental attribution of online and offline membership joins,” he said.
In short, if the revenue generated from all new memberships surpasses metrics you set for all platforms, you’re getting a solid ROI. “Our cost per acquisition (CPA) is determined by dividing our total campaign costs by the attributed memberships,” said Lapcevic. “Although we analyze a multitude of metrics throughout the marketing funnel, the CPA drives the machine, allowing us to learn within our digital platforms and analyze our return on advertising spend.”
It’s also critical to know how many leads are turning into new memberships to ensure your marketing ROI isn’t being harmed by a lack of sales in the actual club.
“Knowing your solid lead conversion numbers versus your sales conversion numbers is important,” said Marzoni. “You could have a marketing campaign that brings in a lot of leads but not a lot of sales — then you have two issues on your hands. The piece is working, but what happens from a sales perspective? Is there a discrepancy between the lead coming in and the sale happening?”
According to Marzoni, measuring marketing ROI depends on your own strategies and metrics. “How you define success is based on the media you’re using and how you’re doing your marketing campaigns, and then how you’re looking at your metrics,” she explained.
Only in rare cases will your marketing strategy hit the mark on the very first try. According to Marzoni, you can’t just let your campaigns run without monitoring them — small adjustments along the way are key to effective marketing.
And if something isn’t working, abandoning that strategy completely isn’t necessarily the best option. “I think about the old saying, ‘Don’t throw the baby out with the bathwater,’” said Marzoni. “You have to continually change, adapt and tweak so you can get that solid ROI. Unfortunately, there are very rare cases of ‘set it and forget it’ in marketing.”
Remember, success in marketing requires testing of different strategies, even if that means revisiting methods that previously haven’t worked. One platform FFC tested years ago, then came back to, was direct mail marketing.
“We’ve got to a point before where we were just not doing direct mail at all,” said Marzoni. “But recently, we decided to look back at direct mail with fresh eyes and see if it would work for us again.”
This time, the investment paid off. “We had been doing some very specific targeting with print that all of a sudden wasn’t yielding results,” said Marzoni. “But when we went back to the full saturation route with mailing, that was the difference.”
Oftentimes, a simple adjustment — anything from your messaging to the time of day your ads are appearing — can make a huge difference. But don’t become stagnant.
“You can never rest,” advised Marzoni. “Because as soon as something will work, it won’t work. So it’s important to go with something different [when it doesn’t work]. Look at email or web ads versus print, or tweak your copy.”
Watch Out for False Positives
As you’re monitoring your campaigns to determine your ROI, there are several metrics that are false positives for success. For example, a Facebook post might get a lot of likes, but if its purpose was to drive prospects to the club’s website, a high number of likes doesn’t necessarily translate to more revenue.
“You have to be sure you understand how a conversion is defined, specifically with social media, especially if you’re doing any paid social media marketing,” said Marzoni.
She also noted it’s important to remember each platform’s metrics are configured to help that particular business. Each medium will have its own measurements it can use to persuade businesses to buy more ads.
Marzoni’s best advice is to get a second opinion on the data you’re looking at. “Employ an independent third party that can back up marketing data, like Google Analytics,” she said. “It’s cheap and easy to set up. Then you’ve got an immediate way to track your URLs or lead generation.”
To get the best marketing ROI, understand how your demographic responds to campaigns across all platforms and measure the results that come from adjustments you make along the way. “Data works in a lot of ways, depending on how you spin it,” said Marzoni. “You have to be an advocate for yourself and set up your own independent tracking to be able to verify what you’re being told is true.”